Trends in 10b5-1 Adoption and Oversight

When insiders own company stock, diversifying their shares requires diligence and care. A 10b5-1 trading plan is a vehicle for executives to manage concentrated stock positions. Today, these plans are on the rise. With increased scrutiny of Insider trading, firms are adding oversight and providing clearer guidance in how plans are structured.

The Morgan Stanley/NASPP 10b5-1 Survey of 325 companies, conducted in Spring 2015, found that the use of 10b5-1 trading plans is growing. A majority of firms both review and approve each plan. Oversight is common practice. Firms want to continue to offer 10b5-1 plans as long as they remain within the boundaries of the company’s insider trading policies.